Paperwork, fees, taxes… selling a property in France can feel daunting if you are not used to it.
Here are some useful tips to bear in mind.
1. What ‘diagnostic’ checks are essential when selling a property?
All sales require the seller to provide check documents to the buyer, called diagnostics.
The exact list depends on when the property was built.
All properties require:
An energy performance report (DPE) – This gives a rating from A to G as to the energy efficiency of the home. If it is rated F or G, then you also need a separate ‘energy audit’ report, as to what measures and costs would be required to improve its performance.
A soil/ground risk and information report – This relates to earthquakes and other natural risks, or any mining in the area etc.
In relevant areas, there will also be a check for termites.
If your home is not connected to the mains sewerage system, then you also need a check of the condition of your septic tank system.
These checks are often combined into a single ‘pack’ to make it easier to arrange. You should expect to pay from €300 upwards, but you can shop around to find the best-priced diagnostiqueur professionel to do these checks for you.
If the property is more than 15 years old, you will also need a gas and electricity installation report. If the property was built before July 1997, you will need an asbestos check. And if the property was built before 1949, you will need an asbestos risk report and a lead exposure risk report.
Properties located within close proximity of an airport also need a noise report.
2. What documents do I need?
The seller must submit:
The title deeds
Copies of your property tax bills (taxe foncière, and taxe d’habitation if the property is not a main home)
Any invoices and ten-year warranties from companies that carried out any work in the past 10 years
If you have had significant work done but are not able to provide invoices for it (because it was paid for in cash, for example), you should be upfront about this, for full transparency to avoid being accused of having hidden the fact if something was later to go wrong. You could potentially be liable if anything goes seriously wrong with the construction within the 10-year period since it was built.
If the sale involves a flat in a larger building, you will also need:
Documents relating to the co-ownership of the property will be required, such as co-ownership regulations and amendments, financial documents, and minutes of the last three annual general meetings.
3. What are the roles of a notaire and an estate agent when selling a property?
All property sales require the involvement of a notaire but the details of the process can vary.
Many people opt to sell via an estate agent, who will provide an estimated value, market the home for you and organise visits from interested buyers.
If you are selling via an agent, then once the property has an interested buyer, the estate agent themselves will often draw up the compromis de vente preliminary sales agreement, and then send the file to the notaire.
The notaire then assesses the agreement, and draws up the final deed of sale.
You could however consult a notaire before you decide to sell. In this case they can also give an informed opinion on the property’s value and some notaires will actively help to find a buyer for the property, though not all of them do this.
They will have a good knowledge of the local market and also have access to national databases of sales.
The notaire can also carry out the whole paperwork process, including for example, in cases where you are selling directly to a member of the public (particulier à particulier) without the involvement of an agent.
4. What if the buyer does not get their mortgage within the timeframe?
The preliminary contract usually states that if the buyer needs a mortgage to buy and does not successfully obtain one within a set period of time, the sale process stops and the former buyer will receive their deposit back.
This is because the money needed to buy the property is a key condition of purchase, as stated in the contract.
If this condition is not met, the seller would be released from the contract, and would be free to find a new buyer.
5. If the buyer already has a notaire for the sale, do I need my own?
You do not need to use your own notaire. The system in France means that only one notaire can formalise the sale.
However, you may wish to consult your own notaire for advice. The notaires will work together in this case.
Notaire fees (which are mostly made up of taxes that the notaire passes on) are paid by the buyer. In the event that there are two notaires working on the case, the fee will be split between them.
6. What charges does the seller have to pay?
They need to pay for the cost of the property checks when the house goes on the market.
If you bought with an hypothèque (traditional mortgage where the loan is directly guaranteed against the property), then the notaire will need to draw up a deed of discharge (un acte de mainlevée) to remove this once the sale has been completed.
Also, if you sell the property for more than you paid for it, and the property is not your main residence, you will also need to pay capital gains tax, which a notaire will help with.
7. What does it mean if the property has a ‘servitude’ attached?
A ‘servitude’ is some kind of right related to your property that is owned by a third party; for example, the right to go through your land to reach another property, or if a neighbour’s sewer connection crosses into your property.
You can sell property with these conditions attached, but you need to make the access clear to the buyer. The condition will appear in the preliminary contract and in the sale agreement.
This also applies to any relevant maintenance or repair costs attached to the access.
8. Can the buyer take action if they find ‘hidden defects’ in the property?
All preliminary contracts state that private sellers are exempt from legal action in the event that ‘hidden defects’ (vice cachés) are found in the property. This relates to aspects of the property that existed at the time of sale, were not obvious, but have later caused a major functional problem.
These contract clauses, however, only apply if the seller was unaware of the defect. If the seller demonstrably knew about a defect before sale, but did not disclose it to the buyer, they may be liable for legal action.
9. Who pays the taxe foncière on the property?
Taxe foncière is charged on those owning property on January 1 each year.
It is customary for the buyer to pay a pro-rata element of the taxe foncière liability for the applicable year when buying a property.
10. What about the taxe d’habitation?
The taxe d’habitation – if applicable, such as for a second home – is charged on those using a property on January 1 each year.
It is not customary for any taxe d’habitation to be refunded to the seller since it is based on the person or people using the property on January 1 of the year in question.
Taxe d’habitation is no longer payable on main homes.
11. When do I need to pay capital gains tax, and when am I exempt?
Capital gains on property are not applied if you are selling your main home.
Other properties can be eligible for it, and in this case, part of it is a form of income tax and part is made up of social charges.
In the case of properties that are eligible for it, the amount of the taxable capital gain is progressively reduced if you have owned the property for six years or more, starting with a reduction from the sixth full year onwards.
If you have owned the property for more than 30 years, or the sale price of the property is less than €15,000, you will also not pay.
In other cases, capital gains tax may be due if you sold the property for more than the amount for which you purchased it.
The rate applied is 19% tax and 17.2% social charges. However, the social charges are reduced to 7.5% in the case of people who live abroad in the UK or EU/EEA/Switzerland and/or are not a burden on the French health system (including UK and EU state pensioners in France who have S1 forms).
Additional tax (at 2-6% depending on the size of the gain) is also levied on ‘high’ capital gains (where the gain is more than €50,000). This is only levied on the part above €50,000.
12. Can I have the money from the house sale paid into a foreign account?
In most cases, it is possible to request that the money be paid into a foreign account and if it is in the European Sepa area, such as the UK, this will facilitate the transfer.
However, in some cases, your notaire may have a preference or requirement for the funds to be paid into a French bank account first, for security reasons or factors related to your particular sale.
Having it paid into a French account also leaves you free to choose how you transfer the money and what exchange rate you obtain.
Note that post-Brexit, there is an additional requirement for UK residents selling French property to have a fiscal representative to check for any capital gains tax due. This also applies to other people who live outside the EU or EEA.
The rep will charge a fee of around 0.5% of the sale price.
These taxes will be deducted from your final sum before it is paid to you, so in itself, this should not change the way the funds are paid.
How is property tax shared out for sale of French second home?
Hundreds of Britons have considered selling second homes in France
Second-home tax move confirmed and four other French property updates
Buying and selling a home in France: What is the viager system?